BHP disappointed over LNG terminal veto

Global mining giant BHP Billiton Ltd says it is disappointed by the decision of California governor Arnold Schwarzenegger to veto the construction of an $US800 million ($A973.06 million) liquefied natural gas (LNG) terminal and will consider its options.

"We respect but are disappointed with the (Californian) government's decision to disapprove the project," a BHP Billiton spokeswoman said.

"For the past four years, we have been working co-operatively with state and (United States) federal officials and regulators, and we've designed and re-designed that project along the way to meet concerns of regulators and members of the public.

"We now need to consider all the comments made, and as a result of that we're not in a position to comment further."

BHP Billiton had planned to build the LNG terminal off the coast of the Los Angeles celebrity enclave of Malibu.

But Mr Schwarzenegger announced on Friday that he would veto the project after Hollywood celebrities - Pierce Brosnan, Martin Sheen, Tom Hanks, Cindy Crawford, Olivia Newton-John and Halle Berry - opposed the terminal.

The decision came despite Prime Minister John Howard flying to Los Angeles in 2004 to lobby Mr Schwarzenegger on behalf of BHP Billiton.

But Mr Schwarzenegger ruled that BHP Billiton's proposal was environmentally unsound.

"Any LNG import facility must meet the strict environmental standards California demands to continue to improve our air quality, protect our coast and preserve our marine environment," Mr Schwarzenegger said.

"The Cabrillo Port LNG project, as designed, fails to meet that test."

BHP Billiton planned to build a 14-storey, 295-metre long LNG terminal 22.25km off the Malibu coast.

BHP Billiton hoped to ship the LNG in supertankers from gas fields off the west coast of Australia to the floating terminal off Malibu and then pipe it to the California mainland.

Although California is desperate for LNG, opponents said the proposal would generate enormous amounts of greenhouse gas emissions.

BHP Billiton suffered major defeats last month when two Californian regulatory bodies, the State Lands Commission and the California Coastal Commission, ruled against the project.